🌎 Farewell to the golden age of fossils #124

Happy spooky Monday! There’s a whole lot of legacy oil and gas companies dressing up as new energy this year. As fossil fuel demand officially hits its peak this decade, budgets (and brands) of legacy energy providers are changing to meet customer (and investor) demand for more diversification.

In this week’s funding, we’ve got more than $1B across some 25 companies (!) — a Dubai hybrid and high-performing seed company raises $300m, a MA lithium-ion recycler raises $300m, and Boulder-based copper mining extractor raises $100m. Climate dry powder continues to pile up with Blackrock pocketing $4.5B for a decarbonization fund, KKR $1.9B for a climate action fund, and Saudi Aramco $1.5B for a sustainability fund.

In the news this week, Apple weighs into its’ supply chain to tackle GHG emissions, Biden’s tally of the ‘social cost of carbon’ passes federal appeals, and ArcelorMittal and BHP team up to test carbon capture at steel plants (a notoriously hard to measure source that we’re irrationally excited about!)

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Fossil nears its inflection point

Fossil’s peak may finally be in sight - and O&G companies are taking note.

Last week, the IEA published its annual World Energy Outlook 2022 (WEO) signaling a historic turning point for the energy transition. For the first time ever, even the most conservative scenario based on prevailing policies predicts that fossil fuel demand will reach its peak within this decade. In succession, coal use will drop in the next few years, natural gas will plateau by 2030, and oil demand will level off due to rising EV sales by the mid-2030s.

Cue the rebrand. Fossil fuel companies are racing to overhaul their marketing from a heavy-fossil footprint towards a broader and cleaner energy mix. Last week, Schlumberger was the newest member to join the growing list of O&G cos moving from gray into the green.

O&G rebranding timeline

2022: Oil-field services giant Schlumberger rebranded from its family name to “SLB”, indicating a shifting focus to newer energy services in carbon capture, hydrogen, geothermal, energy storage, and critical minerals.

2021: Total, a French multinational energy company, rebranded as “TotalEnergies” in June 2021 after a unanimously-passed shareholder resolution to demonstrate its transformation into a broader energy firm.

2018: Norwegian Statoil rebranded to “Equinor” in March 2018 to highlight its clean energy push.

2017: Orsted, a global leader in offshore wind, was formerly known as Dong Energy (short for Danish Oil and Natural Gas, of course 😜)

But don’t judge an energy co by its cover branding. The true story is told only by its budget.

Documenting Orsted's energy shift *(Source: Peter Fisk)*

Case in point: Orsted’s dramatic push phasing out coal and gas and investing in offshore wind. But as part of Orsted’s green transformation, it shed the Dong oil & gas business for $1.1B to INEOS, one of the largest privately owned E&P businesses in the North Sea to continue operating the gray assets. Divesting is not the same as sunsetting insofar as actual global carbon impacts are concerned.

While major O&G cos may be changing their tune, buyers beware of public companies under the gun “brown-spinning” or selling off the highest-emitting components to separate, often private, cos which can continue to operate dirty assets out of the spotlight. In a real-time potential actual brown-spin, we’re watching AGL, Australia’s top electricity generator and carbon emitter. AGL’s demerger proposal to separate its clean generation and coal and gas retailing arm was blocked by shareholders “to take advantage of the economic opportunity presented by decarbonization” - and not delay the closure of AGL’s remaining coal-fired power plants.

If you can’t divest, then invest. Along with brand and business shifting, O&G cos are pouring billions of new capital into climate tech. Saudi Aramco just raised a whopping $1.5B to invest in technologies supporting its net zero ambitions across carbon capture, hydrogen, and nature-based climate solutions. The largest oil producer in the world now joins the ranks of other O&G cos with dedicated venture funds, including the likes of Chevron, Shell, BP, Occidental, and Equinor.

Deals of the Week (10/24-10/30)

🌱 Advanta Seeds, a Dubai-based company developing high performing and hybrid seeds for agriculture, raised $300m in funding from KKR and UPL.

🔋 Ascend Elements, a Westborough, MA-based company recycling lithium-ion batteries, raised $300m ($200m equity, $100m debt) in Series C funding from Fifth Wall Climate, SK ecoplant, Oman Investment Authority, Lithium Americas, Gly Capital Management, Mirae Asset Capital, Shinhan GIB, Hitachi Ventures, InMotion Ventures, TDK Ventures, Orbia Ventures, At One Ventures, TRUMPF Venture, and Doral Energy-Tech Ventures.

⛏️ Jetti Resources, a Boulder, CO-based copper mining extraction company using low-grade primary sulfides, raised $100m in Series D funding from T. Rowe Price, Teck, Rothschild, Mitsubishi, Freeport Mcmoran, and BHP Ventures.

🌱 Ostara, a St. Louis, MO-based developer of sustainable phosphate fertilizer, raised $70m in Series C funding from Carica Sustainable Investments, Forage Capital Partners, the Cibus Funds, and Grosvenor Food and Agtech.

🍝 BioVeritas, a Bryan, TX-based company upcycling food waste into ingredients, raised $65m in funding from Ara Partners.

🌱 DeHaat, a India-based agritech platform improving supply chain and production resilience within agriculture, raised $45m in Series E funding from Sofina, RTP Global, Prosus Ventures, and Lightrock India.

🔋 AM Batteries, a Boston, MA-based provider of dry-electrode manufacturing technology for lithium-ion batteries, raised $25m in Series A funding from Anzu Partners, TDK Ventures, Foothill Ventures, Toyota Ventures, Zeon Ventures, SAIC Capital, VinFast, Doral Energy-Tech Ventures, and Creative Ventures.

🔋 Ionblox (prev. Zenlabs), a Fremont, CA-based producer of a lithium-ion battery with a silicon dominant anode, raised $24m in Series B funding from Lilium, Applied Ventures, and Catalus Capital.

🌾 AgroSpheres, a Charlottesville, VA-based company developing environmentally-friendly crop products, raised $22.2m in Series B funding from Ospraie Ag Sciences, Lewis & Clark AgriFood, Cavallo Ventures, and Bidra Innovation Ventures.

🌱 Neoplants, Paris, France-based producer of genetically modified houseplants to absorb air pollutants, raised $20m in Seed funding from True Ventures, Heartcore, Entrepreneur First, and Collaborative Fund.

🥩 Heura Foods, a Spain-based alternative protein company, raised $19.9m from Unovis Capital and angel investors.

♻️ Cruz Foam, a Santa Cruz, CA-based circular materials company providing replacements for single-use plastics, raised $18m in Series A funding from Helena, One Small Planet, Regeneration.VC, At One Ventures, and SoundWaves.

⚡ ZD Power, a China-based provider of virtual power plant technology, raised $13.8m in Series A funding from GL Ventures, Source Code Capital, and Creo Capital.

⚡ Frequenz, a Germany-based provider of DER asset management and optimization, raised $13m in Series A funding from SET Ventures and 468 Capital.

☀️ Xurya, an Indonesia-based solar power rental and installation company, raised $11.5m in Series A funding from Surya Semesta Internusa and Mitsui.

🌎 Joro, a Oakland, CA-based platform tracking and reducing users’ climate footprints, raised $10m in Series A funding from Sequoia Capital, Amasia, Norrsken VC, and Arrive.

⚡ SYSO Technologies, a Cambridge, MA-based market operator for renewable energy and battery storage developers and asset owners, raised $10m in Series A funding from Lacuna Sustainable Investments.

💨 Paebble, a South Holland, IL-based manufacturer of carbon-negative building materials, raised $8m in Seed funding from Walerud Ventures, Pale Blue Dot, Grantham Foundation, and 2050.

🐟 Forsea Foods, an Israel-based company growing cultivated eel meat, raised $5.2m in Seed funding from Target Global, The Kitchen FoodTech Hub, PeakBridge VC, Zora Ventures, FoodHack, and Milk & Honey Ventures.

🚗 Zevvy (prev Flux), a Hayward, CA-based provider of D2C electric vehicle financing solutions, raised $5.4m in Seed funding from MaC Venture Capital, BoxGroup, MissionOne Capital, Gardner Capital, I2BF Global Ventures, and Climate Capital.

⚡ Impact Bioenergy, a Seattle, WA-based company converting food waste into renewable natural gas, raised $3.6m in Series A funding from ITOCHU Corporation.

⚡ RIFT, a Netherlands-based developer of iron fuel to generate heat, raised $2.3m in Seed funding from Rubio Impact Ventures, BOM, and Energy Transition Fund Rotterdam.

🛰️ Global Surface Intelligence, a UK-based company utilizing satellite data to provide forestry analytics, raised funding from Alter Technology TUV Nord Group.

🔋 H55, a Switzerland-based company developing electric aviation propulsion solutions and battery systems, raised funding from RTX Ventures.

⚡ SenseNode, a Sweden-based SaaS company developing technology that monitors and optimizes energy usage, raised funding from Latour Future Solutions AB.

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Exits & New Funds:

Blackrock raised $4.5B for its fourth global infrastructure fund focused on Decarbonization, Decentralization and Digitalization.

KKR raised $1.9B for its second impact fund focused on climate action, sustainable living, learning, and inclusive growth.

Saudi Aramco raised $1.5B for a sustainability fund focused on initial investment areas in carbon capture and storage,energy efficiency, nature-based climate solutions, digital sustainability, hydrogen, ammonia and synthetic fuels.

Satgana raised $30m for its first fund, aimed to invest in climate tech startups across Europe and Africa.

European Lithium, a Australia-based lithium-mining company hoping to be one of Europe’s only sources of the key metal, is going public at a $972m valuation via Sizzle Acquisition Corp.

In the News

The European Union is set to ban new combustion-engine cars by 2035. Carmakers will be required to reduce the emissions of new cars sold by 55% in 2030, before reaching a 100% cut five years later.

Brazil elected Leftist former President Lula with 50.90% of the vote, to replace “Trump of the Tropics” President Bolsonaro who promoted “development at all costs” with deforestation in the Amazon nearly doubling during his Presidential term.

Australia joined the non-binding Global Methane Pledge to cut methane emissions by 30% by 2030. Government investment to assist the pledge will include up to $1.9b from the National Reconstruction Fund to support agricultural methane reduction and low emissions technology manufacturing.

A federal appeals court rejected several states' bid to block the Biden administration's interim tally of the "social cost of carbon,” stating it doesn't challenge specific rules or policy decisions.

Apple called on its global supply chain to take new steps to address GHG emissions, stating they will evaluate their manufacturers’ yearly progress on decarbonization and efficiency upgrades.

Steel giant ArcelorMittal and mining giant BHP teamed up with Mitsubishi Heavy Industries to test carbon capture at steel plants, notoriously hard to decarbonize industrial emissions sources.

California-based Enphase will launch its first US-based clean energy hardware manufacturing plant thanks to IRA tax credits. They plan to open 4-6 factory lines by mid 2023, expecting to produce between 3 to 4.5 million microinverters per quarter. Meanwhile, First Solar will invest $270m in an R&D innovation center to be “the first of its scale” in the US and accelerate American leadership in the development and production of advanced thin film photovoltaics.

GFANZ, which accounts for assets worth $153T, dropped its partnership with UN's Race to Zero campaign. The change comes amid tensions between GFANZ and Wall Street firms over how far they should go in their climate commitments.

Born of a collaborative effort among community-based organizations and individuals, the Equitable Building Electrification Fund is a new fund investing in the equitable transition to building electrification for frontline communities (and issuing a $50m call to action).

Pop-up

Your brita filter is blinking. Virginia’s tap water has a new source - treated wastewater.

NYC residents are fighting a city plan to rebuild a higher sea wall which would temporarily close a local park.

Jellyfish is on the menu, due to overfishing and rising temps. Click here for recipes.

Chris Sacca on purity tests, toxic Twitter, and how the climate tech opportunity “almost feels unfair.”

Solugen in Bloomberg this week. Check out our original interview with Sean and Gaurab, from when they first became a unicorn.

There is global consensus that climate change brings catastrophe. Now what? Go beyond catastrophe and visualize the future, with David Wallace Wells.

Or, see the future in Los Angeles in 3D. The redesigned La Brea Tar Pits & Museum has good bones. It tells the story of the ice age through fossils.

Gautam Adani is worth $120b and is the richest man in Asia. The coal baron is investing tens of billions in renewables. Is it greenwashing? Or the beginning of an age of renewables barons?

Matchmaker Matchmaker. Now corporates can use “Patch Offtake” to fund multi-year development projects. Patch will set up the software development infrastructure, so project developers can draw down more carbon.

India pledged net-zero by 2070. McKinsey projects that 75% of that India hasn't been built yet. Like all management consultants, they have recommendations.

Opportunities & Events:

🗓️ Project Drawdown: Tune in on Nov 3 to a 60-minute webinar with Executive Director Jon Foley as he presents research that points to which climate actions we should prioritize—across sectors, timescales, and geographies—to make the most of efforts to achieve drawdown.

🗓️ Women in Cleantech & Sustainability Goes to Europe: Register for a series of events from Nov 7-9 taking place in Paris & Brussels to meet the WCS European delegation team and Paris cleantech ecosystem.

💡Future Climate Venture Studio: Apply by Nov 13 to the new program from UConn, R/GA Ventures, and CTNext for climate tech startups developing mitigation, adaptation, and energy solutions.

💡 Chain Reaction Innovations: Apply by Nov 30 to CRI, which is looking for scientists and engineers focusing on science-based innovations to join a two-year paid Fellowship with access to Argonne National Laboratory and up to $220K in non-dilutive funding.